This article first appeared on GuruFocus .
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Revenue:Increased 5.9% to $712.8 million, with growth across all three divisions.
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Like-for-Like Revenue Growth:Improved versus the prior year.
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Adjusted EBITDA:Increased 5.1% to $141.5 million, with margins maintained despite inflationary pressures.
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Adjusted Earnings Per Share:Increased 6.9% to 85.6p, aided by a reduced average share count from the share buyback program.
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Acquisitions (Australia):Six acquisitions completed comprising 14 sites for 43.3 million; two further acquisitions completed and two contracts signed in the new financial year.
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Acquisitions (UK):Contract signed for first UK acquisition in some time.
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Outlook:Solid start to the new financial year; expects to perform in line with market consensus.
Release Date: September 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue increased by 5.9% to $712.8 million, with all three divisions driving growth.
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Adjusted EBITDA increased by 5.1% to 141.5 million, maintaining margins despite inflationary pressures.
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Adjusted earnings per share increased by 6.9% to 85.6p, benefiting from share buybacks.
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Expanded presence in Australia with six acquisitions (14 sites) and signed contracts for further acquisitions, plus first UK acquisition in some time.
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Improved client and employee Net Promoter Scores (NPS) and reduced vet vacancy rates, indicating better retention and satisfaction.
Negative Points
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Softer market conditions in the final quarter due to weaker consumer confidence and extreme weather in the UK.
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Like-for-like growth of 2.1% for the year, with a stronger first half but a weaker second half impacted by weather.
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Footfall remains a challenge, particularly for routine preventative treatments, affecting overall volume growth.
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Healthy Pet Club numbers declined slightly, though retention rates remain sticky.
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Inflationary pressures persist, including a 8 million annualized impact from increased national insurance costs and higher utility costs.
Q & A Highlights
Q: On the start to FY27, can you give more color than "positive" given nearly three months in, and what the exit rate could be by the end of the half? A: CFO Robin Alfonso noted that last year delivered like-for-like growth of 2.1%, with a stronger first half (closer to 3%) than second half, the latter impacted by extreme weather in the UK. That extreme weather continued into July, but August performance returned to levels in line with the first half of last year.
Q: Can you discuss the R&D tax credit release? It looks like the incremental ~3 million year on year explained nearly half of EBITDA growth what should we expect going forward for both the income and the provision release? A: CFO Robin Alfonso said RDEC recognition was 15.1 million last year versus 15.7 million this year consistent year on year. He expects RDEC income to be similar, slightly less, around 15 million in FY27. The provision release reflects a prudent approach to RDEC claims; as uncertainty with HMRC unwinds, the provision was reduced, and he expects it to reduce further next year.
Q: You're appointing a Chief Client Officer what will their role be and how will it work going forward? A: CEO Richard Fairman said that with a joint brand and technology investment improving the client journey, there is more to do in central marketing and CRM. Given the challenging economic backdrop and the CMA process, there are things within the company's gift to drive client footfall and improve client service. The new role will sit on the executive committee and focus on that activity.
Q: On UK acquisitions, you've exchanged contracts on a relatively material ~15 million deal, with ~50 million earmarked across geographies. Is that a comment on the opportunity, should we expect more, and where can leverage get to? A: CEO Richard Fairman said CVS was keen to return to UK acquisitions where accretive opportunities exist, and this is a very good quality two-site practice. The 50 million will be well spent, and the multiple is accretive to the group. CVS remains keen on Australia with a strong pipeline, and will stay selective. If that means spending more than 50 million, provided capital is available, it will. On leverage, the stated ceiling is 2x, but CVS may temporarily go above 2x for accretive opportunities given strong cash generation.
Q: Post-CMA, are you seeing a more constructive environment from peers, perhaps on price? A: CEO Richard Fairman said having certainty is super helpful, with no surprises in the CMA announcement. Chief Veterinary Officer Paul Higgs added that the clarity is great and most practices had been preparing for the final remedies for six months. He noted work is needed as a profession to rebuild trust and be seen as providers of great veterinary care, and that CVS is well positioned to do so.
Q: On like-for-like components for FY27, how much comes from pricing, footfall (new clients), and capturing more value from existing clients? A: CEO Richard Fairman said all three will contribute. Prices were raised in the summer, slightly above recent years. Footfall remains a challenge across the profession but is mixed; where animals are ill or injured, clients invariably bring them in, reflected in strong growth in laboratory and referral businesses. Routine preventative treatments are where footfall is weaker, and the Chief Client Officer can help. Value per client has grown through higher ATVs, enhanced care, facilities, technology, and investment in people, with vet supply improving.
Q: On Healthy Pet Club numbers, which declined does that include Healthy Pet Club Advance, and are there trends among those cancelling subscriptions? A: CEO Richard Fairman said Healthy Pet Club Advance launched July 1 and has seen good growth. The core HPC offering is a preventative health scheme; the advanced version adds unlimited consultations for an extra monthly fee and has been popular. Overall HPC volumes saw a slight reduction, but retention rates are sticky. Prior growth was partly driven by migrating acquired clients onto HPC. CFO Robin Alfonso added the small reduction has stabilised and the figures include Healthy Pet Club Advance members.
Q: On page 10, the FY27 like-for-like bar was at the bottom of the 4%8% medium-term range, but historically you said FY27 probably wouldn't quite get there. Any further thoughts on FY27 like-for-like? A: CEO Richard Fairman said the outcome is unknown with only two-plus months into the year, but August showed improvement. CVS is very confident in returning to the 4%8% range, with building blocks being price, stabilising volumes, and great client care. Labs and referral hospitals grew well, and Animed Direct returned to EBITDA and revenue growth in the second half. He can't put a date on returning to 4%.
Q: Lab growth was strong last year is that a new trend or tougher comps, and similarly for Animed, is there a recovery with easier comps next year? A: CEO Richard Fairman said labs serve CVS practices and third-party practices, with good growth in case volumes and average transaction values. Most lab tests support ill or injured animals, so growth reflects broader trends and is expected to continue, though the 25% growth last year is challenging to repeat. CFO Robin Alfonso said Animed replatformed websites, added online payment (Apple Pay, Google Pay), and next-day delivery. First half saw adverse EBITDA performance due to price elasticity tests that eroded margin; revenue was strong but EBITDA less so. Softer revenue comps aren't expected, but softer EBITDA comps may be.
Q: Any update from the board on timing of a new CEO appointment announcement? A: CEO Richard Fairman said he has made clear to the board he is retiring but is committed to leading the business until a successor is ready. The board is undertaking a thorough search and will announce his replacement in due course. For now, he is keen and committed to driving performance.
Q: Can you comment on trends in vacancy rates for vets and nurses, and what you're seeing on the cost side for people and other costs? A: CEO Richard Fairman said inflationary pressures included increased employer national insurance (an annualised 8 million impact) and rises in national minimum/living wage. Forecasts assume no further NI surprises and more sensible
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
